U.S. CREDIT WEEK AHEAD: Perelman’s Vericast to Pricing New Contract
The leveraged loan market will continue to thrive next week as investors continue to look for assets that can perform well for a period of rising yields. In junk bonds, Vericast Corp. by Ronald Perelman is on the market.
Funds that invest in risky loans added $ 686 million in the week ended Feb. 24, according to Refinitiv Lipper. This is the seventh consecutive entry reporting period and the longest streak in a 15-week streak of cash inflows starting in July 2018. The influx comes as money grows more and more. more. turns into asset classes that offer floating interest rates like leveraged loans with fixed payments on most conventional bonds.
At least six lender meetings are scheduled for next week and nearly 20 deals totaling more than $ 14 billion have commitments due. Applied Systems Expected to Complete Support for EZLynx Acquisition offering on Monday.
Fresh out of a new As a monthly record for February, the high yield bond market is also expected to maintain the issuance frenzy in March, making it the busiest start to the year in history. According to data compiled by Bloomberg, just about an additional $ 5.5 billion in supply would make it the busiest first quarter of all time.
Companies are still seeing strong demand for new issues and more deals are underway. Perelman’s Vericast is on the market with a offer in two parts. Mattel could refinance its senior bonds at 6.75% due 2025, which are the most expensive in their capital structure, according to Bloomberg Intelligence.
Cheap Debt Rush
The US primary market for investment grade companies also experienced its busiest February, surpassing the previous record of $ 113 billion set in 2015, and faces a busy issuance schedule for next week.
More than $ 50 billion in sales could be valued over the next five trading days, according to an informal survey of high-quality bond brokers. Graphic Packaging International LLC and National Retail Properties Inc. each hosted investor awareness events on Thursday.
This week’s rate rout has pushed U.S. corporate borrowing costs to an eight-month high, forcing bankers to urge their clients to sell more debt now before costs go up even more. the ascend in the benchmark, 10-year Treasury yields pushed Bloomberg Barclays’ investment grade bond index – a blue-chip borrowing cost indicator – to 2.16%, the highest since last June .
Telecommunications giants Verizon Communications Inc. and AT&T Inc. have arranged a total of around $ 40 billion in bank loans to help buy 5G wireless waves. Once drawn, the loans would have to be largely repaid by new banknotes, which could buoy issuance of quality bonds.
Latin American companies can also issue more debt in foreign markets in March as companies come out of voluntary profit crashes, according to Andre Silva, head of Latin America capital markets for BNP Paribas. One or two countries could also make new agreements, he added. Peru mandated banks to hold calls from fixed income investors in Asia, Europe and the United States this week, with a deal on euro and dollar denominated banknotes with intermediate to long maturities expected to follow.
A handful of energy companies are expected to release their results next week, making them candidates to sell junk bonds. Oil and natural gas supplier W&T Offshore Inc. releases its fourth quarter results on Wednesday, followed by Summit Midstream Partners Thursday. Energy companies have already been active borrowers this year amid rising crude prices and recent energy crisis in Texas.
Sinclair Broadcast Group Inc. and Community Health Systems Inc. is among the indebted borrowers to present at JPMorgan’s Global High Yield & Leveraged Finance conference.
– With the help of Katherine Doherty, Gowri Gurumurthy, Brian W Smith and Lara Wieczezynski